Krispy Kreme (DNUT) returning to the public markets this week with an IPO looking to raise $560M to $640M at a $3.5B to $4B valuation. They are looking to sell shares between $21 and $24. The company went private in 2016 when JAB Holdings bought them for $1.35B and they plan to hold onto 38.6% of shares. JAB’s Chairman is also planning to buy $5M in stock while JAB will buy another $50M to $100M in stock on the open market. DNUT has spent the last three years focused on creating significant changes to their business model including expanding on an omnichannel strategy, greater control of their network in key markets, and starting to expand outside the US. DNUT has a ‘hub and spoke’ model with fresh shops, ecommerce/delivery, branded treats, and hotlight theater shops. Ecommerce has grown to around 18% of all sales and they’ve found that digital sales have about a 60% higher transaction value. They see a massive, untapped opportunity as the indulgence market grows to $650B worldwide and premium, high-quality but affordable experiences pick up momentum with younger demographics.   DNUT currently operates within markets that represent only about half of that TAM and it’s a market that grows overall at 5% CAGR (doughnuts are a faster-growing part of the indulgence market growing around 10%). The company sees a huge whitespace opportunity too with around 4.5B people without easy access to a store despite overwhelming brand awareness. DNUT is almost singularly a doughnut company with 93% of sales from the product and over 75% of their doughnuts sold in what they refer to as ‘sharing quantities.’ In 2018, DNUT bought a stake in Insomnia Cookies which moves them beyond the iconic doughnuts and JAB has said many times recently they think the brand could be the ‘next Krispy Kreme.’  DNUT revenue rose 17% in 2020 to $1.12B on a loss of $60.9M, their third straight year of losses as they focus on investing in the business.